MAJOR ASSUMPTIONS:

 REVENUES- based on the questionnaire floated the company will assume a sales mix of
73% for school textbooks and reviewers and a 27% for school supplies.
-it is also assumed that the cost o reviewers and textbooks is at Php250, while
the school supplies is at Php170.
Presented below is the average selling price for each category of school item:

BOOKS SUPPLIES
Cost of the school item 250 170
Allocated fixed cost 35.74279 35.74279
TOTAL 285.74279 205.74279
Mark up 10% 10%
Selling price 314 226
Output VAT 12% 12%
Invoice price 352 253

 COST OF SALES- based on average prices of textbooks and supplies derived from prices
that’s existing in the market.
 SALARIES AND WAGES- will be given every 15th day of the month and is subject to SSS,
and Pag-ibig. 13th month pay will be given at the end of year and a day off every week.

NO. OF EMPLOYEES POSITION MONTHLY SALARY

1 Accounting clerk Php 8,000
1 Cashier Php 7,000
1 Store room personnel Php 7,000
1 Security guard Php 6,500
2 Sales representative Php 6,500
TOTAL SALARIES EXPENSE Php 35,000

Note: The depreciation of machineries, equipment, and tools shall be computed using straight-
line method. Formula: Annual depreciation=Total cost-salvage value/EUL (in years)
-The estimated salvage value of each depreciable asset is assumed to be 5% of its total
cost.
-While the Estimated useful life (EUL) is assumed to be 5 years for machineries and
equipment, and;
-10 years for furniture and fixtures.
 DEPRECIABLE ASSETS- include equipment and machineries, administrative equipment,
and machineries furniture and fixture and other assets.
 UTILITIES EXPENSE- includes light, power, water, telephone, and internet expense.

-The LIGHT AND POWER shall be supplied by. BENECO Inc. at the rate of 7.8233
KwH.
-To get the daily energy requirement, the energy requirement in KwH/unit of
equipment must be multiplied by the no. of units of that equipment and
multiplied to the no. of working hours/day which is 9 hours.
-The daily energy requirement would then be multiplied to 300 days.
-For the computations, 4 decimal places were considered, while in the final
result only 2 decimal places were considered.

-The WATER shall be supplied by BAWADI who charge a minimum of Php 340 for
11-20 m3 of water.
-It is assumed that the company’s water/month is within P340 minimum.
-The water rate shall have an increase of 3.2%/year due to inflation.
-It is assumed that the water usage is to be 80% and 20% to production
administrative department respectively.

-For the TELEPHONE AND INTERNET, the company will avail the promo of PLDT
which is Php 999/month.
-So, the annual telephone and internet expense will be P11,988.

 OPERATING EXPENSE- includes all Advertising Expense, Depreciation Expense-

Administrative, Licenses and Business Taxes, Office Supplies Expense, Employer’s Pag-
Ibig Contribution, Employer’s Philhealth Contribution, SSS, Property Insurance-
Administrative, Utilities Expense-Administrative, Organizational Cost, and other
operating expense.
-Advertising expense is assumed to have no cost for the company will use other
plan which is social media.
-Licenses and Business Taxes is composed of Mayor’s permit fee, garbage fee,
sanitary permit fee, police fee, business plate ID, stickers, SEC registration, BIR payment,
DTI name registration and occupation taxes.
-Office Supplies Expense is assumed to be 100% of the total annual supplies
bought, thus making the supplies end 0% of total annual supplies bought.
 This shall include ballpens, markers, bond papers, inks, etc.
 It is assumed that there will be no Purchase Discount Loss
because the company will make sure to pay its obligations before
due.
 ORGANIZATIONAL COST- shall include cost of hiring and training employees, renovation
cost, equipment installation costs, feasibility study cost, notary and filing fees cost, and
all other costs incurred in the business establishment.

Table 4.1 Organizational Cost

BIR Registration Php 500

SEC Form Php 350
SEC Registration Fees Php 1,800
SEC Miscellaneous Fees Php 475
SEC Verification Php 120
Notary Public Php 150
Documentary Stamp Fee Php 15
Regulatory Fee
Mayor’s Permit (500)
Sanitary Permit (100)
Tax Certificate Fee (150)
CEPMO and Fire Clearance (225)
Fire Inspection Fees (45)
Business Plate (150)
Garbage Fee (2,400) Php 3,570
Mayor’s Fee Php 500
DTI Registration Fee Php 815
Barangay Clearance Php 300
Utilities Connection Charges Php 5,000
TOTAL Php 13,595

Table 4.2 Projected Taxes and Licenses

2014 2015 2016 2017 2018

BIR Renewal Php 500 Php 500 Php 500 Php 500 Php 500
DTI Renewal Php 315 Php 315 Php 315 Php 315 Php 315
Mayor’s Php 500 Php 1,000 Php 1,000 Php 1,000 Php 1,000
Permit
Sanitary Fee Php 200 Php 200 Php 200 Php 200 Php 200
Garbage Fee Php 300 Php 300 Php 300 Php 300 Php 300
TOTAL Php 1,815 Php 2,315 Php 2,315 Php 2,315 Php 2,315